The Future of Sales with Mark Roberge: Part 3

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Jeff is a Silicon Valley veteran with 25 years of experience in sales, marketing & channels. 15 of those years have been in SaaS startups, prior to joining Ziff Davis to head up sales, channels & alliances for their B2BSignals division. Ad adviser to startups in his free time,Jeff also enjoys the game of chess and being outdoors.

In the third part of our conversation with Mark Roberge, we continue to discuss his thoughts on customer value generation, as well as some fascinating stories he shared on how HubSpot achieved high levels of alignment between Marketing, Sales and Customer Success. If you missed part 1, please find it here.

Customer Value Generation

On the subject of customer value generation, Mark continued: “As a tech sector, we are still collectively climbing out of our “shelf-ware” roots, where back in the day you would go through a 12-18 month sales cycle, close a $2 million deal, send in a professional services firm to install the software on the customer’s servers, and that was it - the minute the salesperson got the contract the champagne was popped, that’s all that mattered! Most of the customers back then never used the software but this didn’t matter, some champion internally at the company had put their career on the line to buy it, and now they were stuck with it for the next 5 or so years. Those “shelf-ware” days are long gone. The cloud, SaaS, freemium, and other software trends make it really easy to adopt software but often equally easy to leave. I think that’s one thing we would do very differently at HubSpot if we started the company today. Early on we measured success based on revenue traction, and I think that’s a pothole today. For any business starting out now, the key metric should be customer value generation. Companies need to define their leading indicator of success, which is usually some combination of product setup & usage, and measure the percentage of customers that reach that success target within a few months of signing up. Not enough businesses are focused on this early, and that’s what we would do differently now.”

Functional Alignment at HubSpot

Mark shared his perspective on what he said “is definitely an important topic for many organizations today: how to keep Sales and Marketing aligned as the company grows.” He said: “At HubSpot, we partnered with thousands of organizations to help modernize their marketing function, and often this help would bleed into the sales function as well. I would say that 99% of the time, I found the alignment between sales and marketing to be very dysfunctional. Marketing looked at salespeople as overpaid spoilt brats, and salespeople looked at marketers as people who sat around and did arts and crafts projects all day with no clue how to close a deal. Unfortunately, I still think this describes many organizations today.”

Mark continued: “This state of affairs was tolerable in the 80s, 90s and even early 2000s, but today, with so many buying journeys start in a domain owned by Marketing, then move to a domain owned by Sales, and finally end up in a domain in this new function known as Customer Success, a lack of alignment between these groups is a “kiss of death”. However, if done right, this alignment can be a huge competitive advantage relative to the market.”

He described how they worked hard to address this issue at HubSpot: “Back in the day we were very data-driven in terms of our definition of what an MQL was, and how many we thought were necessary for us in the mid-market, for example, but quickly realized that this wasn’t enough. We needed general guidance as to what was a high potential lead vs a low potential lead, and eventually, we had a groundbreaking moment when we put a monetary figure for revenue potential at the lead level. What I encourage organizations to do is split their addressable market into an ABC factor in terms of their demographic and an ABC factor in terms of the engagement they can get out of a lead, and assign a dollar figure to the AA’s, the BA’s, the AB’s etc.

This allows you to essentially put Marketing on a revenue quota similar to Sales. That was the way we managed the marketing team for many years, and it helped the organization hold a daily accountability to performance in Marketing that typically was only felt in Sales.”

He also described the commitments made on the sales side: “On the sales side, we had a disciplined Service Level Agreements (SLAs) for these leads, meaning that sales reps had to call the leads within a certain number of hours and with a certain level of frequency over the course of several days or weeks. They also had to call the leads with a certain efficiency to an agreed upon conversion rate, and if all these metrics weren’t aligned there were penalties such as leads being pulled away from that sales rep and assigned to someone else. It might be difficult to gravitate towards this level of accountability from a large traditional existing culture that is entrenched with say, 1000 reps and 200 marketers. However, since we had the chance to build this type of culture from the ground up, it became accepted that the marketing and sales organizations had to deliver these efficiencies and level of performance to one another. It was a culture of high performance and accountability to one another, aligned around a common mission of improving the way companies sell and market to customers.”

In the next and final part of our conversation with Mark, we continue the discussion on the unique ways HubSpot achieved alignment as it grew, as well as his thoughts on the future of Sales and how organizations can be a better setup for success to engage the C-level in their target customers.